Are you having difficulty keeping track of expenses, invoices, and lodging taxes? Don’t worry, you are not alone. Bookkeeping can be confusing if you are unfamiliar with the record-keeping process, but with the right support, you can reduce the burden of managing business books. In this blog post, we’ll discuss the basics of good bookkeeping, invoice management, and reconciling bank accounts.
What records do you need to keep?
As a business owner, your company must have accurate records. You can engage a reliable bookkeeper Melbourne for your business to keep records to help you prepare your BAS and annual tax return, and to meet tax rules. They will ensure to keep the following records for your company:
- Income and sales records
- Purchase or expense records
- Year-end records
- Bank records
- Goods and services tax (GST) records
- Fuel tax credit records
- Employee and contractor records
Generally, bookkeeping includes monitoring your expenses and recording all your company’s financial transactions. For a small business owner, it is crucial to track your expenses, as these can vary significantly based on the type of business you run, the time of year, business expenses, business liabilities, consumer demand, and the products or services you offer.
Tracking expenses: What should you track for your company?
Whether you are a small business owner just starting or running an established business, it’s essential to know what you should track and how. If you are unfamiliar with the process of tracking expenses, you can seek help from a small business bookkeeper to record and track every expense for your business. A bookkeeper will track your profit and loss, both small and large. For a business owner, it’s essential to divide things into categories, including supplies and materials, utility bills, fixed assets (what your business owns), labour costs, and other relevant expenses (money your business owes).
Invoice management: What information should you include?
Invoicing clients is one of the crucial parts of bookkeeping. There are a few important things to consider when it comes to invoice management.
- First, make sure to include all required information on the invoice, such as the client’s name, address, the services or products offered, and their cost.
- Plus, send invoices on time so your clients know exactly when and how much they need to pay.
- Next, following up with your clients if you have yet to receive payment after the deadline is a good idea. Whether through phone calls or email, staying on top of invoices will help ensure your company’s financial health.
How does bookkeeping make tax lodgment easier?
When it comes to tax return lodgment, there are various items you can claim as deductions. It’s important to implement fundamental bookkeeping practices, such as accurately tracking your expenses and keeping the necessary documentation. This is especially crucial for small business owners who want to maximise their deductions and minimise their tax liability. Accurate records help taxation accountants in lodging tax returns accurately and on time.
There are various tactics and techniques you can use to effectively track your expenses. For instance, accounting software or apps like Xero, MYOB, or QuickBooks can help you stay organised and ensure that nothing is overlooked. Additionally, make sure to keep detailed receipts or invoices for all your purchases, especially if you plan to deduct those expenses when tax time arrives.
Understand the principles of the accounting process
It’s important to understand the basics of bookkeeping, like how to record debits and credits, keep a balance sheet up to date, and set up business accounts, such as a bank or cash account. You’ll also need to choose between cash accounting and accrual accounting, which will help you keep accurate records, track your financial performance, and follow tax rules.
Using accounting software to manage your transactions and cash flow can save you time and make it easier to create financial reports, income statements, and other records.
Conclusion
Bookkeeping can be daunting and time-consuming, but all businesses must stay on top of their finances. Whether you want updated financial statements or need a team to manage your bookkeeping tasks, our team will help with reliable bookkeeping services.